Eisentrout Corporation has two production departments, Machining and Customizing. The company uses a job-order costing system and computes a predetermined overhead rate in each production department. The Machining Department’s predetermined overhead rate is based on machine-hours and the Customizing Department’s predetermined overhead rate is based on direct labor-hours. At the beginning of the current year, the company had made the following estimates:
Machining Customizing
Machine-hours 23,000 26,000
Direct labor-hours 9,000 10,000
Total fixed manufacturing overhead cost $82,800 $39,000
Variable manufacturing overhead per
machine-hour $1.30
Variable manufacturing overhead per direct
labor-hour $3.70
During the current month the company started and finished Job T272. The following data were recorded for this job:
Job T272: Machining Customizing
Machine-hours 60 10
Direct labor-hours 60 50
The estimated total manufacturing overhead for the Machining Department is closest to:.
a. $68,900.b. $81,900.c. $97,900.d. $13,000.
Answers: 3
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